Thursday, March 31, 2005

If there's a problem with U.S. debt, it's not nationality

Don Boudreaux has it exactly right:
The real problem is neither the nationality of America's creditors nor the size of the current-account deficit. It's government irresponsibility -- irresponsibility that results in excessive government spending and sub-optimal means of financing this spending.

There's something surreal about serious people discussing serious proposals for how the government can solve these problems. The vast, twisted set of political institutions that separate power from responsibility, and separate individual choices from individual consequences, is the ultimate source of whatever genuine problems exist – namely, here, outlandish government spending and excessive deficit financing. Concerns about the current-account deficit or about the nationality of Uncle Sam's creditors are red herrings.
I won't even try to summarize it; just go read it.

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